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two firms competing question Two rms are competing for a government contract by choosing a Low, Medium or High effort. Firm 1 has an advantage

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two firms competing question

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Two rms are competing for a government contract by choosing a Low, Medium or High effort. Firm 1 has an advantage because its effort is more productive at favorably inuencing the government's award decision. The table below presents each rm's expected reward from winning the government contract given its choice of effort and the choice of effort made by its competitor. Firm 1's effort choice determines which row of the table, while rm 2's effort choice detemiines which column. Firm 1's expected reward is in the lower left-hand corner of each cell, while Firm 2's expected reward is in the upper righthand corner of each cell. Firm 2 Low Medium High Law Firm 1 Medium High a. Does either player have a dominant strategy? Justify your response. (15 points) I). Find all the Nash equilibria for this game. (15 points)

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